Rubber producers expected to sign new price pact
Rubber producers expected to sign new price pact
SINGAPORE (AFP): Asia's key rubber producers opened annual
talks here yesterday amid optimism they would sign and ratify a
new global price stabilization agreement ahead of a December
deadline.
Failure by producers and consumers to sign the third
International Natural Rubber Agreement (INRA) hammered out in
Geneva in February would liquidate the current pact expiring on
Dec.28, industry officials said.
"I understand that the ANRPC member countries are seriously
considering the signing and ratification of INRA 1995," said J.
Lalithambika, secretary-general of the Association of Natural
Rubber Producing Countries (ANRPC).
Asked how Asian producers viewed the proposed agreement, she
said: "It's a political decision."
The agreement is expected to top the agenda of the two-day
talks here of the ANRPC assembly, the policy-making body of the
association.
ANRPC, an inter-governmental organization, comprises India,
Indonesia, Malaysia, Papua New Guinea, Singapore, Sri Lanka,
Thailand.
They produce about 85 percent of the world's natural rubber.
Singapore is not a rubber producer but is a major
transshipment and trading center of the commodity.
Only Malaysia, Indonesia, Thailand and Sri Lanka are among the
six producer-members of the International Natural Rubber
Organization (INRO) which implements the INRA agreement. The 20
consumer members in INRO are led by the European Union, the
United States and Japan.
The agreement sets a minimum reference price for rubber at
which the INRO buffer stock manager intervenes to buy or sell
rubber in the open market to help narrow price fluctuations.
Sources said that internal bickering among key producer
countries over INRO administrative issues and worries that the
Republican-dominated US Congress was generally not favorable
towards commodity pacts were delaying the pact's endorsement.
P.O. Thomas, a consultant with the Kuala Lumpur-based INRO,
warned at the sidelines of the Singapore meeting that the natural
rubber industry would face "serious problems" if INRA 1995 was
not signed before the deadline.
"If they don't sign now that means they are not giving the
agreement a chance to survive," he told reporters.
Thomas said there was some delay encountered by governments
which had to seek cabinet or parliamentary approval of the new
pact, which will be for a four-year period from the current five,
with two possible 12-month extensions.
Technically, he said, the current agreement would be
liquidated if INRO members did not sign the new pact.
"The agreement provides for a period of three years for
liquidation but it depends on the INRO council whether they want
to immediately take procedures leading to the liquidation,"
Thomas said.
No one has signed the pact so far but officials here said Sri
Lanka has given it the go-ahead.
Natural rubber prices have moderated after reaching a six-year
high earlier this year on higher demand by manufacturers and poor
weather in producing areas.
The INRO daily market indicator price yesterday was 289.31
Malaysia/Singapore cents, a figure based on the average rate of
the two currencies and the prices of three rubber grades covering
markets in Kuala Lumpur, Singapore, London and New York.